8 simple questions Inspired by 20 years of celebrating Canada’s Best Managed Companies

#BestManaged

Thinking like one of Canada’s Best Managed Companies is surprisingly simple. That’s what makes it so hard.

Simplicity leads to clarity.

Clarity leads to focus.

Focus leads to success.

Canada’s Best Managed Companies cut through today’s complicated business landscape with simple questions.

We’ll show you how some of Canada’s Best Managed Companies responded to their challenges with simplicity, discipline and focus.

Hopefully, they’ll inspire you to do the same when you face challenges in these areas.

Let’s look at simple questions for 8 aspects of business inspired by our book, Power of the Best.

Mergers and Acquisitions

Innovation

Attracting Talent

Productivity

Strategy

Leadership

Globalization

Raising Capital

A struggling discount brewery in Saskatchewan recognized that the beer market had changed.

• Young people were drinking less beer • Quality beer became more important than cheap beer • Many of the ‘authentically Canadian’ breweries were purchased by foreign companies

The CEO knew they had to change, but the company had been doing things the same way for 30 years.

Strategy

1. Does everyone buy into the plan?

Rather than imposing his 6-point plan on his people, the CEO showed them what the result of the plan would look like.

• A new flagship brand that honoured the company’s heritage • A return to authentic Canadian brewing techniques that could make them feel proud

With everyone on board, from the assembly line staff to the sales teams, the brewery reversed its fortunes in just three years.

Strategy

1. Does everyone buy into the plan?

Strategy

1. Does everyone buy into the plan? It’s easy for your people to lose sight of goals in a sea of ‘action items’.

It’s easy for your people to lose sight of goals in a sea of ‘action items’.

Make sure everyone in your organization knows your strategy, understands it and believes in it. The more buy-in you have, the greater chance you have of success.

Strategy

1. Does everyone buy into the plan?

An oil & gas distribution company was growing quickly due to an aggressive M&A strategy.

• These acquisitions essentially meant they were hiring people they had never met • They were inheriting corporate cultures that might not have aligned with theirs • They had more staff but fewer people to lead them

They knew they needed more leaders, but weren’t in the position to identify them.

2. Are your natural leaders leading?

Leadership

Rather than look for leaders within their organizations, they help budding leaders come to them.

• Their financials are transparent to all employee so anyone can put forward a well-informed proposal • With an operational mantra of ‘the person doing the job knows best’, they give everyone an opportunity to lead

By giving employees the tools to be proactive, the company can more easily identify and support its natural leaders.

Leadership

2. Are your natural leaders leading?

Leadership

2. Are your natural leaders leading? It’s easy for natural leaders to get lost in a company’s process.

It’s easy for natural leaders to get lost in a company’s process.

A clear path to leadership, and a company-wide commitment to empower people who take that path, make identifying the future leaders of your company easier. And it makes the future health of your company stronger.

Leadership

2. Are your natural leaders leading?

A toy company was about to pitch for the global licensing rights for ‘Monsters 2’.

• They were strong in North America, but not as strong around the world • Outside North America, they were reliant on local distributors to make deals for them • They were unable to communicate directly with those distributors and retailers

They needed a more local presence around the world to effectively manage the opportunity.

3. Where do you need to be?

Globalization

Rather than remain a Canadian company that sold products globally, they invested the money to become a global company.

• They opened branded offices across the globe • They developed an IT system to connect them directly with retailers and distributors in real time

With a physical presence around the world, they had more control of their operation, knew more about their global inventory and could better service their retailers.

And they won the Monsters 2 pitch.

Globalization

3. Where do you need to be?

Globalization

3. Where do you need to be? It’s easy to say you’re a global company.

Globalization

3. Where do you need to be? It’s easy to say you’re a global company. Just because you sell global doesn’t mean you are global.

It’s easy to say you’re a global company. Just because you sell global doesn’t mean you are global.

The more places you can be, the more control you have, and the more successful you can become.

Globalization

3. Where do you need to be?

Raising Capital

4. How much do you have and how much do you need? A refueling company needed more money to continue its strong growth momentum.

• Their line of credit was maxed out • They wanted to avoid spending more borrowed money • They wanted to move quickly

They knew they had to find an innovative way to raise capital.

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Rather than look to alternative sources, they looked to their own receivables.

• They adjusted the payment terms on their invoices to get paid sooner (from 34 to 25 days) • This saved them close to $10 million in monthly operational costs

Instead of borrowing more money, they took back money their customers were essentially borrowing from them.

Raising Capital

4. How much do you have and how much do you need?

Raising Capital

4. How much do you have and how much do you need?It’s easy to spend someone else’s money.

It’s easy to spend someone else’s money.

But before you borrow, take a look at how you manage cash flow. You may already have what you need.

Raising Capital

4. How much do you have and how much do you need?

Mergers and Acquisitions

5. How do you fit into the company you’re buying? A veterinary management company was purchasing or partnering with vet clinics across the country.

• Pet owners like the experience of going to a local vet • The idea of going to a vet chain would have been widely rejected • No one who worked for the vet management company was actually a vet or had any vet training

The company had to find a way to integrate themselves into the clinics without devaluing them.

Rather than assuming control of the companies they purchased, they played a supporting role.

• Their company name is not visible in any of the clinics they own • They let the vets manage the day-to- day operations of the clinics • They have 97% vet retention in their clinics

They were humble enough to recognize their place.

Mergers and Acquisitions

5. How do you fit into the company you’re buying?

It’s easy to walk in to a company you buy and immediately put your stamp on it.

Mergers and Acquisitions

5. How do you fit into the company you’re buying?

It’s easy to walk in to a company you buy and immediately put your stamp on it.

By understanding what you’ve purchased, you may find that being a silent partner (even when you have a majority stake), is the best arrangement for success.

Mergers and Acquisitions

5. How do you fit into the company you’re buying?

Innovation

6. When is doing nothing riskier than doing something? In 1998, after years of unpopularity, eggs were making a comeback and one egg farm wanted to lead the way.

• Cholesterol fear is what drove the market downturn • Another downturn could easily happen again • Every egg farmer that survived would have their own plan to make up for lost profits

The egg farm knew it had to stand out in what would be a very loud marketplace.

Rather than continuing to produce the same old eggs, they altered the biological make-up of eggs – something that had never been done.

• They infused their eggs with Omega-3 fatty acids to make them healthier • They created the first on-the-shelf egg white product • These and other innovations led to 13 Canadian Product of the Year wins

Their eggs are now endorsed by the Heart and Stroke Foundation’s Health Check Program.

Innovation

6. When is doing nothing riskier than doing something?

Innovation

6. When is doing nothing riskier than doing something? It’s easy to maintain the status quo.

It’s easy to maintain the status quo.

But if you’re not dreaming big, one of your competitors is. And if you’re not coming up with the next great thing, they are.

Innovation

6. When is doing nothing riskier than doing something?

Attracting Talent

An energy company was having trouble finding men who wanted to be electricians.

• The‘90s downturn sent many aspiring electricians on different career paths • Many boomers who took up the trade during their time were approaching retirement • The trade colleges in the company’s province were in remote, inconvenient locations

They knew they would be facing a labour shortage if they couldn’t attract and retain skilled people.

7. How are you finding the best people?

Rather than continue searching for more men, they invested in women; an untapped source of human capital in the industry.

• They created an on-site training programfor women

• Their female electricians led by exampleand recruited others

• Only 1% of the province’s electricians arewomen, but this company employs 15%of them

They also have a successful aboriginal employment outreach program.

Attracting Talent

7. How are you finding the best people?

Attracting Talent

It’s easy to think there’s only one ‘right kind of person’ for a job.

7. How are you finding the best people?

It’s easy to think there’s only one ‘right kind of person’ for a job.

Keep an open mind and instruct your hiring managers to do the same. It can lead you to valuable human capital you may have never considered.

Attracting Talent

7. How are you finding the best people?

Productivity

8. Are there redundancies in your process? A countertop company recognized a flaw in their process – and in the industry as a whole.

• Installers would measure a space, cut a Cardboard template, then drive the template to the workshop • The stone-cutters would then cut the slab to match the template • They were measuring twice to cut once, while also wasting time and fuel transporting cardboard

They knew they could be more productive by eliminating the cardboard template.

Rather that doing away with the template altogether, they digitized the entire process to ensure more precision and increased productivity.

• They invested in a mobile device thatlinked installers directly to the workshop

• They significantly reduced the time ittook to complete a job

• They reduced opportunities for errorby 50%

They reported a 33%-50% improvement in productivity.

Productivity

8. Are there redundancies in your process?

Productivity

It’s easy to stick to the process you’ve always known.

8. Are there redundancies in your process?

It’s easy to stick to the process you’ve always known.

Standing back and evaluating it once in a while can lead you to opportunities you might not have seen, technologies you might not have thought were possible, and improvements you might not have considered.

Productivity

8. Are there redundancies in your process?

As you can see, it’s the simple questions that often lead to the best solutions.

We’ve been working with Canada’s Best Managed Companies for 20 years and they consistently demonstrate the power of simple thinking.

We can help you succeed like they do.

email us and let’s start talking simply.

John Hughes johhughes@deloitte.ca

Peter Brown petbrown@deloitte.ca

#BestManaged

Want  to  read  more?    

Our  “8  simple  ques5ons”  were    inspired  by  stories  in  the  best-­‐selling  business  book,  Power  of  the  Best:  Innova5ve  Strategies  from  Canada’s  Best  Managed  Companies.  

In  Power  of  the  Best,  authors  Peter    Brown  and  John  Hughes  delve  into  the  key  themes  that  are  essen5al  to  business  success,  illustrated  by  front-­‐line  examples  from  owners    and  execu5ves  of  Canada's  Best    Managed  Companies.  

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